collaboration examples ibp · pdf filecollaboration examples ibp australian s&op planning...

Niels van Hove

Change Sustain TipsA perspective on collaboration and IBPA perspective on collaboration and IBPCollaboration Examples IBP

Niels van Hove

Australian S&OP planning forum, March 2014

Change Sustain TipsThe definition of collaborationThe definition of collaborationExamples IBP

“The action of working with someoneto produce something”

“The action of proactively crossingboundaries to work with someone over aperiod of time to produce something

that has mutual benefit”

Collaboration

Collaboration requires proactive horizontal thinking with a little bit of empathy for the

other silo in order to work towards mutual benefits

By instinct we think vertically rather then integratedBy instinct we think vertically rather then integrated

• Company• Function• People• Culture• Country



Collaboration Examples IBP

Change Sustain TipsWhat would a Martian think?What would a Martian think?Collaboration Examples IBP

Change Sustain TipsWhat would a Martian think?What would a Martian think?

Do countries take action to work together to produce something?


Within a country, are we getting more productive in producing something?

What do you think?What do you think?Collaboration Examples IBP

Change Sustain TipsThe magic of collaboration in business…The magic of collaboration in business…

Better information flows

?

We know that honest and intelligent collaboration can create magic and be a multiplier.

We just have to keep in mind that if we think vertically this all becomes..

“Those who work alone, can onlyaccumulate, but those who collaborate

intelligently can multiply”

Joachim Milberg, chairman BMW

Optimal asset usageLeveraged team capabilitiesLower inventoriesOutperform competitorsCost savingsKangaroos start jumping!Sales increases


Change Sustain TipsCollaboration does not always make sense…Collaboration does not always make sense…

•low •high

•Low

•high

Criticality of relationshipfor Supplier

Criticality of relationshipfor Your Company

Criticality measurements:

% of business, Brand strength, Available alternatives, Business knowledge (IP), complexity

Criticality of relationshipfor Customer

Criticality of relationshipfor Your Company

•low •high

•Low

•high

YourBusiness

Supplier roleCustomer role


Change Sustain Tips…and ‘Megaphone’ * collaboration is not unusual……and ‘Megaphone’ * collaboration is not unusual…

“If you pay me a fee, you are allowedto join my collaboration project”

“If you pay me a fee, I will share mydata and you can figure out how wecan collaborate”

“If you deliver me JIT, I will notcharge you a fee”

* Andrew Downard, ‘Collaborative change’


In the last 30 years we’ve gone through 5 stages of supply chain maturity.

of which the Market Driven phase needs Collaboration*

…still the Supply Chain evolution is in a collaborative phase…still the Supply Chain evolution is in a collaborative phase

Build horizontalconnectors

Continuoustesting

Improving thesignal to market

OrchestrateDemand &

Supply

• Absorb demandvoatility

• Absorb demandvoatility

• Absorb supplyvolatility

• Absorb supplyvolatility

• Costs• Costs

• Purchase to Pay• Order to Cash• Purchase to Pay• Order to Cash

1.Efficient Operations

2. Reliable Supply Chain

• Right Place• Right Place

• Right Time• Right Time

• Right Cost• Right Cost

• Right Product• Right Product

3. Resilient Enterprise4. Agile: Demand Driven

5. Align: Market Driven

• Sense demandand supply

• Sense demandand supply

• Shape demandand supply basedon market

• Shape demandand supply basedon market

*Lora Cecere, ‘Bricks Matter’


SustainExamples

ChangeOn inter-company level collaboration can work…On inter-company level collaboration can work…

Having long term partnerships included in your strategy can pay back

“The strength of these long termpartnerships has been a key driver of ourgrowth since the Group was formed andwill continue to underpin the Group’sstrategy.”

HFG annual report 2012

0

5

10

15

20

25

30

0

200

400

600

800

1000

1200

2005 2006 2007 2008 2009 2010 2011 2012

Op. Profit Revenue

• Collaborative situation:– One plant, with 8 production lines,

producing 400 sku’s– Short term daily replenishment forecasting

based on weather– Every 2 hours updated retailer POS data

from 650 stores on meat sales– Afternoon and evening shift based on this

morning POS data– Next day delivery of products produced in

afternoon shift

Collaboration IBP

SustainExamples

Sometimes even a $3 million price tag can’t spark further collaboration

High volume-low volatility5% of sku’s, 18% of volume 6% of sku’s, 53% of volume

High volume-high volatility

Low volume-low volatility64% of sku’s, 14% of volume 25% of sku’s, 15% of volume

Low volume-High volatility

1.Drive efficiency

low high

Low

high

Weekly demand volatility**

Year

ly d

eman

d vo

lume*

• Order quantities

• Order frequency

• Collaborative planning

3. Review complexity

2. Manage volatility

• Promotional certainty

• Order schedules

• Collaborative planning

• Improve baseline

• Reduce volatility

• Review portfolio

• Improve baseline

• Review portfolio

• Substitute

4. Review complexity

…and sometimes it doesn’t……and sometimes it doesn’t…Collaboration IBP

TipsSustainExamples

Change …within a company it can work too……within a company it can work too…

What happened with the monthly Customer Service Levels and the Low Code?

So what changed?

1. The Process?2. Aligned KPI’s?3. Forecast accuracy?4. Bom/Routing accuracy?5. Attainment?6. Stock levels?7. Organisation?8. Internal Collaboration?

86.0%

88.0%

90.0%

92.0%

94.0%

96.0%

98.0%

100.0%

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Collaboration IBP

Change

A shared purposeA shared purpose

Ethic of contributionEthic of contribution

Horizontal processesHorizontal processes

Value and rewardValue and reward

SustainThere are 4 key organizational efforts to drive collaboration*There are 4 key organizational efforts to drive collaboration*

*Paul Adler and others, 2011

S&OP as a horizontal enabler can be a key contributor to organizational collaboration


But something is missing!But something is missing!

IBPSustainExamples

‘We don’t build services to make money, we

make money to build better services’

‘I want to put a dent

in the Universe’

‘I believe this nation should commit itself to achieving the goal, before this decade is

out, of landing a man on the moon and returning him safely to the earth.’

Leaders who provide a shared purpose, can spark an ethic of contribution and collaboration

ChangeA shared purpose: something bigger than yourselfA shared purpose: something bigger than yourself

‘S&OP is a key enabler to create competitive advantage for our business

and it is the only way we run our business’

Your MD?

Collaboration

‘We believe that through inspiring our people through education and by creating anenvironment where they love to be we can generate more ideas, higher productivityand foremost – happiness’

SustainExamples IBP

*S&OP pulse check 2012: survey amongst 55 participants from 19 countries

ChangeS&OP lacks common goals and purpose…S&OP lacks common goals and purpose…

Many companies don’t even define what level of S&OP maturity they want to achieve

Collaboration

SustainExamples IBP

‘Most companies get stuckbetween stage 2 and 3’ ,

from a 4 stage modelOliver Wight whitepaper

‘Most companies are stuck instep 1 and 2 in

Larry Lapide’s model’Kinaxis ebook, 2012

Change…this impacts the state of S&OP maturity…this impacts the state of S&OP maturity

57% of companies,don’t get further then stage

2 of a 5 stage maturity modelSupply Chain insights, 2013

Whatever S&OP maturity model we use, S&OP maturity stalls

36% of companies’ S&OPprocess are stalled or are

moving slowlyBricks Matter, 2013

‘67% of companies couldnot get to the collaborating stage of

our 4 stage S&OP maturity model’Gartner, 2010

Collaboration

2010 2011 2012 2013 ?

SustainExamples IBP

ChangeIn 2012 I suggested 4 maturity phases of IBPIn 2012 I suggested 4 maturity phases of IBP

If every one makes their own IBP maturity model, why not create my own?

Collaboration

Integrated planning happens between functions, but notenough to make a monthly EBIT projection with gap analysis

Integrated planning happens between functions, but notenough to make a monthly EBIT projection with gap analysis1. Integrated planning1. Integrated planning

2. Dynamic budget planning2. Dynamic budget planning

3. Dynamic strategyand capability planning

3. Dynamic strategyand capability planning

A monthly projected P&L on EBIT level with integrated risksand opportunity scenario’s. Cash flow forecasting

A monthly projected P&L on EBIT level with integrated risksand opportunity scenario’s. Cash flow forecasting

A pulse check on strategic goals, targets, measurements andcapabilities. Strategy guides decisions in budget horizon

A pulse check on strategic goals, targets, measurements andcapabilities. Strategy guides decisions in budget horizon

A shared vision and purpose guides decisions in the budgetand strategic horizon. Emotional attachment created

A shared vision and purpose guides decisions in the budgetand strategic horizon. Emotional attachment created

4. Integrated visionAnd purpose

4. Integrated visionAnd purpose

IBP phase Description

But something is missing!But something is missing!

Collins and Porras, ‘Build to Last’

“A company culture is created from its core purpose

and values. The core purpose is the reason for being;

it captures the soul of the organization.”

“Well defined, integrated and truly lived, purpose

and values will drive companywide behaviour. “

“Imbedded company behaviours will drive a sustainable

company culture, which will last over time.”

SustainExample IBP

ChangeWe know behaviors drive sustainable company cultures…We know behaviors drive sustainable company cultures…Collaboration

SustainExample IBP

Change…we know behaviors are key to implement S&OP……we know behaviors are key to implement S&OP…Collaboration

SustainExamples IBP

Change…yet we assume that S&OP will create magic by itself!…yet we assume that S&OP will create magic by itself!

Successful S&OP = Better team work?

Collaboration

Successful S&OP needs great team work!

S&OP needs some help beyond process and system to become successful

‘Cross -functional collaboration isnot a pre-requisite for

successful S&OP; it’s a resultTom Wallace, 2010

Great team work needs behavioural capability!

SustainExamples IBP

ChangeI therefore suggest a 5th maturity phase for IBPI therefore suggest a 5th maturity phase for IBP

To become great in S&OP we need to be more explicit about behavioral competency

Collaboration

A critical mass of leaders have emotional self-awareness,self control and display constructive behaviors

A critical mass of leaders have emotional self-awareness,self control and display constructive behaviors5. Emotionally competent5. Emotionally competent

‘In every IBP meeting conflict ismanaged to get the best

value out of cross functionaldiscussions’

‘People actually enjoy settlingdisputes, because it will

make the outcome better’

‘People pro actively developand maintain relations with

the other silos

‘People give and receiveconstructive feedback andshow interest in growing

each other’

‘People control themselvesand stay constructivewhen under pressure’

SustainExamples IBP

S&OP

effe

ctiven

ess

Time

S&OP

S&OPS&OP

Common vision, goals,communication, collaboration

5.Emotionallycompetent

Process, Systems, KPI’s, reporting, Hard Skills

Conflict resolution, constructivechallenge, socially savvy, grow people S&OP

ChangeThe 5th phase of IBP; emotionally competentThe 5th phase of IBP; emotionally competent

S&OP effectiveness will always plateau unless soft skills take it beyond

Collaboration

4.Integrated vision& purpose

1.Integratedplanning

2.Dynamic budgetplanning

3.Dynamic strategyplanning

S&OP

SustainExamples IBP

ChangeEffective behavioral styles and emotional competenceEffective behavioral styles and emotional competence

There are tools to measure and deploy emotional intelligence to support S&OP

Collaboration

Examples IBP

Aggressive & defensivestyles limit personal and group

effectiveness, do not createsustainable cultures and

reduce S&OP effectiveness

Constructive styles aremost effective and createsustainable cultures and

improved S&OP discussions

These tools can create emotionally competent businesses and take S&OP beyond

Collaboration

Effective behavioral stylesEffective behavioral styles

Examples IBP

They can create a critical mass off people that pro actively break down the silo’s

MarketingSales

Supply ChainOperations

Collaboration

Effective behavioral styles improves horizontal thinking…Effective behavioral styles improves horizontal thinking…

SustainExamples IBP

Change …so that S&OP magic can happen…so that S&OP magic can happenCollaboration

Successful S&OP =

S&OP processes, systems & KPI’s+

Common vision and purpose+

Emotional competence

S&OP magic can happen when common vision, purposeand emotional competence multiplies S&OP effectiveness

ChangeExamples IBP

About Niels

For over 15 years, Niels has been working as consultant, supply chainmanager and S&OP manager in several multi billion dollar companies inover 10 countries. Niels holds an MSc. in Operations Management fromAmsterdam University, The Netherlands

Social Publications

Thank you!Thank you!

December 2012 February 2013March 2012

Journal ofBusiness

Forecasting

Supply ChainMovement

AFPExchange

FP&ANewsletter

March 2013

Collaboration

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